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In a recent conference call with reporters, the White House made the case for a minimum tax on millionaires, ahead of a speech in which President Barack Obama will make it the centerpiece of his re-election campaign. The president's advisers say it will address the problem of income inequality in America and reduce the deficit. Republicans call it class warfare.

Here's what adoption of the tax -- or lack thereof -- might mean for all of us.

The Oracle of Omaha speaks

As proposed, the tax would require those making more than $1 million per year to pay 30% to the federal government. Right now, the highest federal income tax bracket is 35%, but few actually pay that percentage because the tax code leaves so much room for maneuvering.

According to a report from the White House Economic Council, in 2008 the 400 wealthiest Americans paid an average federal income tax of just 18%. This 30%, then, would be a bare minimum to be paid on income, no matter what else the tax code might say to the contrary.

The idea was proposed last fall by billionaire Warren Buffett, CEO of Berkshire Hathaway (BRK-B), when he discovered that he paid less taxes on a percentage basis than his secretary. It was instantly picked up as a talking point by Obama and has since become known simply as "the Buffett rule."

Capital Gains and Private Equity

As it becomes clearer that Mitt Romney will be the Republican nominee for president, making the Buffett rule the centerpiece of his campaign platform is an obvious move for Obama. Romney is very wealthy, and famously made his millions in private equity as the head of Bain Capital.

Private equity firms typically make money by buying companies, reconfiguring them, and then selling them. Any profit made on the sales of the reconfigured companies is taxed as capital gain, which translates into a flat 15%.

When it was revealed that Romney only paid about 15% on $21 million in income over the past two years, it became political ammunition for both Romney's Republican challengers and Obama -- all of whom were more than happy to paint him as an of an out-of-touch elite in an economically struggling America. In that sense, the Buffett rule was made to order for the president's upcoming campaign.

Of course, it's not Romney's fault his taxes are what they are. That's the tax code as it stands, and by all accounts, there's no funny business surrounding his filings.

But Romney's particular case, high profile as it's become, only serves to underline what many people see as a system that rewards those with the means to manipulate it, or at the very least get the most out of it. This point of view has dangers associated with it.

In October 2011, the nonpartisan Congressional Budget Office released a report showing that in the last 30 years, "income grew by 275% for the top 1% of households, 65% for the next 19%, just under 40% for the next 60%, and 18% for the bottom 20%." When things get too economically uneven, and people feel they have nothing left to lose, they can take to the streets. Look at Athens, or Paris, or London. Whether you feel Occupy Wall Street has a good case to make or not, nobody wants to see a peaceful movement burst into violence.

Citizens, politicians and members of the business community on both sides of the aisle have been calling for tax code reform for some time now. No one likes taxes, but the country can't run without them.

Politics aside, the Buffett rule carries a lot of weight because of the simple fact of who proposed it: one of the richest men in America and no foe of the free market. It may be a step in the right direction, not only to fix the budget and the national debt, but also to reduce the income inequality that may someday lead to true class warfare. Buffett's idea, now Obama's, is one of many. Let's hear more.

Intro to different retirement accounts

TurboTax Articles

Ordinarily, when you sell something for more than what you paid to get it, you have a capital gain; when you sell it for less than what you paid, you have a capital loss. Both can affect your taxes. But if you immediately buy a similar property to replace the one you sold, the tax code calls that a "like-kind exchange," and it lets you delay some or all of the tax effects. The Internal Revenue Service (IRS) uses Form 8824 for like-kind exchanges.

Achieving a Better Life Experience (ABLE) accounts allow the families of disabled young people to set aside money for their care in a way that earns special tax benefits. ABLE accounts work much like the so-called 529 accounts that families can use to save money for education; in fact, an ABLE account is really a special kind of 529.

One of the many benefits of working at home is that you can deduct legitimate expenses from your taxes. The downside is that since home office tax deductions are so easily abused, the Internal Revenue Service (IRS) tends to scrutinize them more closely than other parts of your tax return. However, if you are able to substantiate your home office deductions, you shouldn't be afraid to claim them. IRS Form 8829 helps you determine what you can and cannot claim.

Form 8859 is a tax form that will never be used by the majority of taxpayers. However, if you live in the District of Columbia (D.C.), it could be the key to saving thousands of dollars on your taxes. While many first-time home purchasers in D.C. are entitled to a federal tax credit, Form 8859 calculates the amount of carry-forward credit you can use in future years, not the amount of your initial tax credit.

The Internal Revenue Service (IRS) has the power to seize income tax refunds when a taxpayer owes certain debts, such as unpaid taxes or overdue child support. Sometimes, a married couple's joint tax refund will be seized because of a debt for which only one spouse is responsible. When that happens, the other spouse is said to be "injured" and can file Form 8379 to get at least some of the refund.

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Wayne Bradshaw

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Charities will suffer immensely and those people dependent on these charities will now be dependent on the government for more food stamps and free hand-outs. Does this administration ever think about stuff like this? It is hard to believe that any of them have taken even introductory finance and/or economics course.

Some Liberal... Mitt pays three times..... At going rate when he declares, on the dividends, and at death... Buffet sues to avoid.... Too much to comprehend??/ Thought so... uneducated led by the the uninformed....

Stupid, Stupid, Stupid and praying on the ignorance of the American people. Raising income tax on muliti millionairs is a joke. Millionairs dont have income to tax. The money they live off of comes from investments which is taxed by way of the capital gains tax. The administration knows not to talk about increasing capital gains taxing because that would crash the market, the market being the only way to get any kind of return on your money today. You could raise Buffets income tax to 100% and he would not pay a penny more than he does now. But what difference does that m ake anyway Buffets Berksire Hathaway owes the IRS over 1 Billion dollars he dosewnt think he owes. That, from a manwho thinks millionairs should pay more, figure that one out. these people who pray on the american ignorance are the scum of the earth.

This tax increase will amount to about 3 billion a year.. equal to about 1% of the interest we pay on the national debt.

lets be clear folks.. We take in 2.1 trillion a year. We spend another 1.3 trillion more than that. We have to raise taxes on EVERYONE that pays them 50% JUST TO BREAK EVEN. This crap about a 4% tax increase for the rich..Isn't going to make any difference..and OBAMA wants to use this as an Excuse to spend more.. He said that..really.. HELLO OBAMA.. Wake up.

And then the OBAMA CARE bill came due.... Treasury is empty... Obama Care cant fund the Czars in the Death Panel.... so taxes go up again.... Barry will be organizing in Kenya with his pension..... seems fair if you are uneducated and led by the uninformed... like the Libs who voted for this Clown.